When separating and dividing relationship property, the usual rule is that relationship property is divided equally.
There are however a few exceptions where the unequal division of relationship property may occur. A common exception is a short-duration relationship discussed in our blog article.
We explain what might be considered an extraordinary circumstance that would make sharing relationship property equally unjust, provide examples of economic disparity and how it impacts the division of relationship property, and share how these laws apply to short and long relationships.
Were there extraordinary circumstances?
To establish extraordinary circumstances, the court must be satisfied that equal sharing of the relationship property would be extremely unjust.
If the requirement is satisfied, then the share of each partner in the property is determined in accordance with the contribution that they each made to the relationship. This in practice means that the relationship property is divided in percentages. For example, 80% to the one partner and 20% to the other partner.
As the usual rule is equal division, it can be hard to persuade a court that there should be unequal division.
How does this apply in short marriages?
A claim for unequal division is far more likely to be successful if the relationship is much shorter. As a general rule, the longer the relationship, the less likely it is that an order of unequal division will be made. This is irrespective of the disparity in contributions.
If the length of the relationship was closer to three years, it is more likely that the court will make an order of unequal division. If the relationship is longer than eight years, it becomes unlikely that the court will make an order for unequal division.
What is economic disparity in a relationship?
Economic disparity means that at the end of the relationship if the income and living standards of one partner are likely to be significantly higher than the other due to the effects of divisions of functions, the court may make an order.
To compensate a lower-income partner for the economic disparity in the relationship, the court may choose to award money or assets out of the relationship property.
It is important to note, however, that economic disparity is not enough for the court to make this decision. The reason for the disparity must be a result of a division of functions within the relationship. If there would have been a great difference in income and living standards anyway, then a claim on this basis will fail. We provide examples where this would apply below.
I gave up my career to support my family – what are my rights in a separation?
For example, if one partner gave up her career as a lawyer to look after the children in the household, and the other partner continued with their career, and there is a significant difference in their income and living standards at the end of the relationship, then a claim will most likely succeed.
However, if a partner continued to work during the relationship at their pre-relationship career a claim will most likely fail – even in a relationship with economic disparity.
Another instance where a claim may fail is where a person gave up their job during the relationship but they returned to the same (or similar) job and pay.
by Clinton Light, Special Counsel, Shine Lawyers, Christchurch.
Separating? Shine Lawyers can help
If you think that these situations may apply to your separation, please contact us to discuss.
The Relationship Property team at Shine Lawyers New Zealand has a wealth of experience in representing clients going through a separation. Our depth of experience ensures we are able to achieve the best result possible for our clients, helping them get the outcome they need so they can move forward with their lives.